The Goods and Services Tax (GST) remains much in the news due to rates and several other issues pertaining to the same. So, every now and then, the GST council meets and addresses the issues surrounding the new indirect tax regime, which made its way to India’s tax administration space on July 1, 2018. As it subsumed more than a dozen of central and state-level levies, there was bound to have some complications. And the complications did arise from time to time. Of the complications faced by the general public and businesses, GST tax slabs have continuously made tax administrators to contemplate and lay a roadmap.
Items in Top GST Tax Slabs Rejigged to Lower Rates
You would very well know that GST rates are a 4-tier one - 5%, 12%, 18% and 28%. Taking into account the long-standing demand, the council reduced the tax rates of 90 items, previously sitting in the top slab of 28%, to lower slabs, Not only that, the items in other tax slabs are also shifted to a lower rate. All these and more would benefit the consumers at large.
Items That Have Been Pushed to 18% from 28%
A growing list of items sitting in the 28% tax slab is now pushed down to the immediate lower slab of 18%. These include washing machines, refrigerators, water heaters, vacuum cleaners, hair curlers, hair shavers, lithium-ion batteries, paints, scent sprays, televisions, etc.
Items That are Pushed to 12% from 18%
The list includes purses, pouches, jewellery box, mirrors, photographs, brass kerosene pressure stove, ornamental framed mirrors, wooden frames for printing, art ware of iron, etc.
Which Are The Items to be Sold at 5% GST?
Products such as handmade carpets as well as other handmade textile floor coverings, ornamental trimming in the piece, etc, are now going to be sold at the lowest GST Tax slab of 5%.
What Are Exempted from the Purview of GST?
The items which are exempted from GST include deities made from marble, wood or stone, sanitary pads, raakhis, fortified milk, saal leaves, RBI circulated commemorative coins, raw materials used in brooms, etc.
Impact of the Massive Cut in GST Rates
The massive cut in the GST rates is most likely to bring a smile on the faces of consumers with reduced prices of the products they are going to buy. Also, the volume sales of the business enterprises could also grow substantially. However, the shifting of goods from 28% to 18% could hit the revenue by close to 8,000 crores, according to industry experts.
News of 3-tier GST Rate Structure Gaining Steam
The GST Council is grappling with the idea of converting the existing 4-tier rate structure into one less. Yes, the council is looking to rationalize the indirect tax system by merging the 12% and 18% to 15%, keeping the state revenue and customer needs intact. The development, as and when happens, would bring in further demand in the economy that is waiting to take a full flight in the years to come.
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